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 this shows utter Panic the emergency of of the global financial crisis of 2008 never ended this is that car that was going down the road and suddenly hit a patch of ice and it started spinning out of control and they're overcorrecting and then they're underc correcting and we're going down the road they're trying to regain control but they haven't yet they're they're still making these panic moves as of today and this is what 2008 this is 15 years ago right oh yeah 15

years of out of control and most of their efforts at trying to regain control pump the stock markets due to the way they are handcuffed by the Federal Reserve Act of only being able to buy certain Financial assets that they have to buy through primary dealers the largest brokerage houses in the world the crash has not happened yet but we are getting close [Music] hi I'm Mike Maloney and welcome to ber conomics Financial Armageddon I've got Alan hibd with me Allan how are you doing I'm great Mike thanks how are you

excellent so uh you know a bit of a sensationalized t title but I don't think it's inappropriate whatsoever I think that people have to be uh very very prepared for what is coming and the what I'm going to go over here is I'm going to show everybody that there has been an emergency going on since 2008 we've never gotten over it and we have shifted from Keynesian economics to Bernan conomics by the way for all the people watching I am coining this term right now so if you ever hear anybody

use Bernan conomics in the future that came from me so uh the first uh graph here you youve seen this graph before and it's just the fed the effective federal funds rate and you can see things like I want to point out here that in 1980 it was 9% and then it was uh n 19% right up here 19 so it went up 10% and this looks like the largest move on the chart but that is the amount of percent that they have increased or decreased it isn't the per change of the percentage this is sort of hard to

explain do you have any better way of of describing the percent change of the of the amount of percent that they are adding or subtracting alen yeah sure I mean just just think about going from 10% to 11% it's going up by 10% but only but one one percentage point so imagine going from zero to one or from one to two it's humongous but going 1 to two is 100% from uh 10 to 11 is 10% exactly and so uh this doesn't look as big as this but one of the things that I've never shown before is I put this chart in you

know I've shown the rate of change before year you know year-over-year rate of change but all I did was put this in uh in logarithmic uh chart and here what you're seeing is this is that 10% rate of change and each inch on this AR this this is that 10% amount of change not rate of change I am sorry 10% amount of change and each inch on each measurement on this chart each inch is basically the 10% rate of change the amount of change from your Baseline to where you are today instead of the the

number of percentage points that you are adding or subtracting acting and what you see here is you know the FED going up and down this is the 1% line and you see that um Allan Greenspan uh when he started you know he took the NASDAQ crashed uh he went down to 1% and then he took rates up to 5.25 from 1% um and uh so it ended up at 5.25 and that's right about the same as here back in uh 19 57 I think this is uh and uh it's about the same distance that we've done in the 60s but then you look at

this increase here that goes from 0.1% to uh 5.25 and you see the scale of this so from this one started at 1% went to 5.25 so if you start from the 1% line here this rise from the 1% line is the same amount as this one but it's on top of this change from 0.1 to one which is a factor of 10 so you've got a factor of 10 times a factor of 5.25 this was just a factor of 5.25 so you can see that under Bernan conomics everything is out of control it's insane and they are uh what Ben Bernan did was not know before ber

conomics they used to use interest rates and they would dial them up and dial them down and they would try to be careful alen Greenspan did all of this in these slow measured steps uh uh you know Jer uh um this is uh actually yeah Allen Greenspan and then he handed over the steering wheel to the dial to Ben Bernan right about there and then B Ben Ben banki paned p and he wrote a book called uh the courage to act and the greater courage would be to restrain himself and not act he thinks he's Master of the Universe uh

we've got a little clip of him that we'll play uh later uh with his uh actions that he he took and his overconfidence the arrogance that uh he shows uh but here you've got uh Janet Yellen and then she turns over the but look at how long this took in comparison then she hands over the keys to Jerome Powell and then he panics and uh then look at that increase there it is mindboggling and to show you some of the so if you got any comments on these this rate of change here that rhythmic graph shows well yeah

I want to coin another term here economic Whiplash I mean look at this chart this thing's like all over the place this is this is it didn't give you whiplash before ban conomics it was like a car accelerating and then you see an emergency and you hit the brakes and accelerating and hitting the brakes but this is like you know this is like being shot out of a cannon and then you do things like uh slam into a wall you know so I don't think the free market would uh would have moved rates up and

down so quickly I guess say no and the other thing is that you know they used to dial thing dial the interest rate up and down and that was the fed's influence over the economy but um here uh I show how beran conomics this is the same uh fed funds rate again so that's not logarithmic and then here we have uh Bank Reserves the the uh reserves of depository institutions so these are the reserve accounts that every bank has at the Federal Reserve so it's the bank's checking accounts at the FED uh this

currency never gets a public never sees or touches this currency but we went from something they they got along just fine with uh you know if you look at the uh data in 1960 there was $8.8 billion of reserves that the banks used at the end of the day to lend and borrow to each other and to do uh interbank settlements they would uh send reserves from One bank to another to pay uh and uh they would borrow and so on and you see it go up to 22 23 we'll hit 40 I think it hits 60 yeah we're in the 60s

now but back down in the 40s here and then Allen Greenspan's response to 911 it goes from goes up to 57 uh uh and then the and after we uh did QE and QE as you know Alan from uh uh researching the Federal Reserve Act and the and Bank of England and the uh the Federal Reserves website the method of doing QE traps Bank Reserves uh this is sort of a mere image of the the dollars the the uh the the Federal Reserve buys treasuries from a uh the one of the primary dealers and can't pay the primary dealer because the

primary dealer uh is not a bank and so they have to pay the primary dealers bank which is usually a division of of a Umbrella Corporation but they pay the bank and there's a brick wall inside inside the bank on the back end is all of the banking being done with Reserve Accounts at the FED but the public can't see or touch those dollars the bank is instructed to create a mirror image of those Bank Reserves of bank credit deposited in to the primary dealer's account and the primary dealer is paid

for the so this is a mere image of the currency that was directly injected into the markets by buying Financial assets such as mortgage back Securities and us treasuries but it gets trapped there and uh so um what they did was they came up with new terminology it's just like like like the um NIH the the government since the pandemic has uh redefined uh things like what a vaccine is and what uh uh the definition of herd immunity is and things like that um uh so they changed the definition so this is now called the

ample reserves regime where they've got a lot of these reserves and before that it was called the limited reserves regime except there was no terminology before that because they didn't have to justify what they've done but you can see that things are sort of out of control and then when we look at just reserves one of the things that you and I have been talking a lot about is reverse repurchase agreements because this is a way of uh adding more Bank Reserves or deducting Bank Reserves and

uh it's a repurchase agreement for the uh listener is uh a bank needs some uh Bank Reserves and they will pledge a US Treasury or a mortgage back security to the Federal Reserve the Federal Reserve buys it and creates Currency Bank Reserves when they buy it so the Bank Reserves spring into existence but that uh uh treasury or mortgage back security is now on the uh the fed's balance sheet uh and but it's with an agreement that it's going to be repurchased uh by the Bank in a day a

week a month or a year usually it's like an overnight it's it's one day uh so it's a short-term need for Bank Reserves to be able to pay somebody it's liquidity uh but um it's it's just one more tool another uh switch as you will see or button we used to have this dial interest rates and then Ben banki introduced all these buttons and switches and lever that he can pull and it's become extremely complex any comments on this Alan you know I was just thinking on the on the previous

slide about The Wizard of Oz pay no attention to the man behind the curtain it's like all all these things pulling and like smoking mirors and inventing new technology or excuse me terminology um yeah at the end of the day that's all they can do is create these fake IUS to owe each other and create the illusion of separation between different organizations ations but at the end of the day you can't print Prosperity all you can do is push things around to delay the inevitable and you and I know what that is right

and in The Wizard of Oz what the he's doing when he's pulling all those levers and pushing buttons and turning cranks and stuff uh he's scaring them so he's manipulating their uh fear and this is part of what the Federal Federal Reserve does is they manipulate the greed and fear of the public they're manipulating your mood uh that causes velocity to change quite a bit uh and uh it causes investors to make different decisions and it's only when the curtain is pulled back by Toto the little dog and the uh

the public that is being manipulated gets to see the tools of manipulation that the tools stop working completely so once the public finds out how it works uh the tool this will stop working and they won't be able to manipulate us so it's very important for people to learn all of this stuff so what we've done here is we've added to the Bank Reserves the repurchase agreements now a re this is reverse repurchase agreements I'm sorry a reverse repurchase agreement the FED takes one of its treasuries that

it bought through open market operations sells it to a bank but it's through temporary open market operations and that bank uh signs a contract basically pledges to uh uh sell that back to the FED is going to buy it back and so when the a repur purchase agreement appears it uh deducts uh reserves from the banking sector so it's pulling currency out but as they unwind it and it has to be unwind it's a contract that has to be undone someday there are balances that are uh sitting uh you know there might

be a whole bunch of these repurchase agreements that get rolled over night after night and so they're sitting out there uh as a uh you know an accumulated sum but they all have to be Unwound someday and we're seeing them being Unwound and this actually as they're Unwound it adds reserves uh I can go and change the format or uh change the formula here I'm sorry uh two line one and go minus and so looking at it from the fed's perspective you've got uh U one way of looking at it looking at it from

the bank's perspective it's another way so here we see the this these Bank Reserves being added back into the accounts at the uh banks of the primary dealers but I just the point of all of this is that the there was a stability this is um the uh repurchase agreements so this isn't the reverse repurchase agreements this is repurchase agreements where the uh fed the a bank needs cash they want to make sure that there's a lot of Reserves at the banks and they do these overnight repurchase agreements

the FED uh loans gives them cash uh it's not cash it's Bank Reserves but dollars and the bank uh gives the the FED a treasury this is alen Greenspan's worry about the the uh the uh Y2K bug where they were worried about all of the computers flipping over to the year 2000 and the computers most of them only used the last two digits they they didn't incorporate a four-digit date and so he was worried about everything crashing and basically thinking that it was the year 1900 not the year 2000 and so he

Was preparing for that this is the response to 911 so that's September 2001 that's that's uh loading up the banks with all the reserves for 911 and then we've got the global financial crisis and Ben beran's uh panic but then he Shi this off like it's like it was a light switch and we had zero and then um I I think this was Jerome Powell here by the time we ran into a crisis in the repo markets in uh 2019 and then the response to covid and then he shuts it off so these things are being flipped on

and off like a switch instead and that shows to me panic have you got anything to say about this chart uh yeah I mean like you know they just move from one lever to another one button to another and uh they're just doing what they they can to keep everything afloat it's only a matter of time before they the buttons don't work right you know I see I see this and I see stability here you're going driving down a road you you've got everything under control uh you hit a little puddle or

something here with the Y2K bug uh 911 you know uh you hit some gravel going around a corner and then the global financial crisis and you've hit a patch of ice and now we are spinning down this Mountain Road out of control overcorrecting underc correcting and and uh and the Crash has not happened yet but we are getting close so this is the reverse repurchase agreements in total hi I just wanted to take a moment and thank you for subscribing and mention that if you'd like to help our Channel

please consider my company goldsilver.com the next time you buy precious metals we're one of the most trusted names in the industry our prices are sharp delivery is fast and we have an insiders program where you find out exactly what I'm doing with my own Investments thanks for making goldsilver.com your dealer and now back to the video getting close so this is the reverse repurchase agreements in total and what you see here this is a tremendous scale I mean you know you're talking about zero back here so this is

stability you're talking about the global financial crisis 24 billion dollar then something happening in 20134 that requires intervention into the uh repurchase agreements and re reverse repurchase agreements markets between the banks and uh this is the response to uh the uh crash during covid but then what happened in uh March of 2021 where this expanded from zero to $2.4 trillion doar that the uh Federal Reserve pulled out of the system they pulled $2.4 trillion out of the reserves and they gave the banks all of this high

quality collateral us treasuries uh you know I I don't know what is happening here but since May of this year just since May of this year they've gone from Two and a quarter trillion more than let me see yeah it's more than two and a quarter trillion uh down to .8 trillion this is enormous these moves are are huge and it just shows again out of control so this is uh this is pulling Reserve when this Rises dollars are Vanishing from Bank Reserves when this Falls dollars are appearing in

Bank Reserves and it has to fall eventually because uh the it's the Banks uh have taken a uh treasury uh a treasury or a mortgage back security and promised to pay the Federal Reserve back with interest so they want to pay this off they want to get rid of that eventually it can't go on forever so these dollars have to be shoved back into the system back onto the bank's balance sheet got any uh uh comments on this one yeah absolutely so it's a another example of the economic Whiplash

it's not just something shooting up which is what we see on some graphs it's shooting up and crashing back down and that's true of the FED funds rate repurchase agreements and reverse repos which we see here everyone is shooting up at a record high and shooting down at at a record speed as well so it's it's that huge Whiplash it's it's crazy it is crazy so here we have uh us treasury bills so these are the shortterm uh treasuries and you can see you know if you go back we had stability this had

climbed steadily for decades and decades this was just part of the fed's balance sheet and then Ben beran decides to get rid of all of them down to zero so this is no longer P part of the fed's balance sheet and then Jerome poell decides well yes it is again any comments on this one's in the book any yeah exactly I've seen this one before we you and I have talked it quite a bit I mean depending how quickly we'll see here in the next year I mean if this comes crashing back down again it'll be

yet another one that that drops at a record low so uh time will tell but it's it's really the same story so here we are at uh 0 three and a quarter trillion 326 billion and it's already down at uh 22 226 billion basically so it's dropped by a hundred billion dollar uh since August of 22 so the these are fairly short periods of time for these enormous moves and so here now I've had to play with some of the scales for people watching I'm not trying to create a lie here all I want you to do is look

at how the FED is panicked this shows utter Panic the emergency of of the global financial crisis of 2008 never ended this is uh uh the this is that car that was going down the road and suddenly hit a patch of ice and it started spinning out of control and they're overcorrecting and then they're underc correcting and we're going down the road they're trying to regain control but they haven't yet they're they're still making these panic moves as of today and this is what 2008 this

is 15 years ago right oh 15 years of out of control and most of their efforts at trying to regain control pump the stock markets due to the way they are handcuffed by the Federal Reserve Act of only being able to buy certain Financial assets that they have to buy through primary dealers the largest brokerage houses in the world any comments on that one you know I just thought for a minute about why the Federal Federal Reserve uh officially exists it's the Dual mandate to create price stability and maximum

employment and I'm looking at these numbers like how does this affect either one of those things exactly this is just a total disaster but it's not just a disaster it's a it's a disaster still waiting to happen because what all of this has done is it has warped the economy we don't have uh the the the warpage is bigger than at any time in history the bubbles you know I was the one that coined the term the everything bubble everybody uses it now uh then I tried to coin the term the almost

everything bubble and almost nobody uses it except for a few people in the precious metals sector because compared to the currency supplies and everything else that they've inflated uh and the condition that the world economy is in uh the uh the uh gold and silver are the only assets that I can identify that are fundamentally undervalued compared to everything else yeah absolutely I agreee I use the phrase the the almost everything bubble thanks to you so because there's pretty much always there's pretty much always

something that's going to be undervalued when when other things are overvalued so Keynesian economics Bern conomics this is all Bernan conomics and it's just it's absolutely insane this was all uh based on all of the ideas that Ben banki put in you know he outlined a lot of this stuff in his 2002 speech deflation making sure it doesn't happen here so the effects that this has had on the monetary Aggregates uh the bottom line is actual cash Federal Reserve notes currency and circulation the black line

is the uh Bank Reserves on top of that the it's base currency so you've got monetary base the red line is the monetary base uh plus the reverse repurchase agreements monetary base M2 and I had to make that times a thousand because you've got things here that are measured in millions and things that are measured in billions and one billion on this scale here would be would just say one uh unless it's measured in millions then it would say 1,000 so we have to actually multiply billions by a thousand

to get it to have the extra zeros so that these things all line up but I wanted to put this on the same scale and you know uh look at everything is just out of control totally insane this is going to come back to haunt us probably in um in 2024 if they you know it's an election year they're gonna try and put this off until 2025 when it's somebody else's responsibility or uh when the reelection has already been secured uh and and it doesn't matter if everything falls apart because uh you know it'll be the second

term then uh for Biden or if somebody else wins it's their first term but it's the other the other party's problem so they're going to try and hold this together but I want to remind everybody that um that 2008 was an election year as well and everything fell apart while George Bush was still in office uh and and so um they always try and put off but it was his second term basically so uh uh he didn't have as much to lose but the Republican party was still trying to uh uh keep everything together uh back then

so we've got the you know we're looking at it from the other perspective uh this time around but sometimes they just can't control this sometimes the economy is so warped that the energy that's built up can no longer be contained and uh it looks like we are at one of those inflection points today and so um any comments on this the monetary Aggregates by the way um one of the comments I I need to make this one can vanish and if you watched uh if if you haven't watched uh our uh

our analysis of the book The Great taking uh you need to watch that this is sort of an extension of that we've covered the velocity of the of the uh it's M2 velocity mostly that we were covering but we've covered velocity and uh in that book they're talking about a deflation and what will happen in a deflation is a a lot of these dollars here are going to vanish those dollars will vanish these dollars will vanish these dollars are printed dollars that you can actually have at home or

someplace that you can get to them that don't vanish and in a deflation they gain in purchasing power instead of being a dumb thing to do you know I always have I've I've shown it a couple of times a a big stack of uh of bundles of 20s and bundles of hundreds so I've got a a month or two of U of expenditures that are completely covered by a stack that I can get to of cash that is outside of the banking system because this is nothing but digits that are IUS for that the the those Federal

Reserve notes it's Bank credit and the black line you never see those dollars those are Bank Reserves but they spring into existence at a moment's notice and they vanish at a moment's notice it's not money it's currency well this too is currency it's a fiat currency but it's the one that can't vanish and it will gain in purchasing power so for me I hold mostly precious metals that can't vanish they're nobody else's liability that green line is still somebody else's

liability the federal reserve's liability that's the reason it's called a Federal Reserve Note uh but it isn't one that is going to vanish until they make them illegal if cbdcs uh come out and everybody gets on them they will eventually make Federal res Reserve notes illegal and they will be worth nothing showing again that they are not money they are currency any comments yeah just just basically when we think about all these currencies they all go to zero when the issuing uh Authority either declares or is is

forced to admit that there's no value there uh and this is true of a government a bank any Authority a company your favorite arcade right they might issue tokens and say yeah these are good for one game but then if they go out of business we say okay we can't honor those arcade tokens anymore right so basically you know the the things you mentioned where they could say they're not uh they're not going to honor them anymore that they're worthless or bankruptcy and insolvency is something

that can happen to the Federal Reserve and it can happen to the US uh the only thing that is nobody else's liability uh is you know you've got to have the only real estate is is uh a hard asset but it's still uh has it is still has a counterparty risk in that there are taxes due uh gold and silver are the only financial assets that you can hold that are no one else's liability so um with that I want to say that we covered a lot of this in the book and people may want to pick this up uh and watch that uh

video on the great taking because it looks like things are getting closer and closer and in my first book I said that we can't just go straight into inflation or hyperinflation when I released that book everybody was saying inflation or hyperinflation it didn't happen except in financial assets and real estate uh real estate had just deflated because of the uh the um Financial collapse but everybody was saying inflation or hyperinflation and I said that's not the way it works the big boys always win the

ones that are running the game so it's the house in the casino it is the house that ends up winning if you go straight into a hyperinflation you get to pay off your mortgage with just a few minutes of work that isn't the banks winning in order for the banks to win if you've got everybody out on credit that's when you have to have a deflation and in a deflation uh you can't sell assets because your assets are underwater you owe more on them than you can sell them for and so the banks get to take them

and then they get to sell them and they've got both all of the payments that you have made and the value of owning the house and renting it or selling it and so um uh it requires some sort of big deflation when everybody is in debt and what has happened in just the past few years uh we were because of zero interest rates we all took on a lot of debt and then the lockdowns and uh the government sent cash and people felt better they spent some of that cash when the lockdowns were listed it lifted and

we saw a big inflation so prices are now up the cost of living is now up but did you get a matching raise and that the answer to that is almost no it it's it's no for almost everybody you didn't get a raise to compensate you so your cost of living has gone way up and what we've seen recently is debts increasing credit card balances increasing and uh now we've got the restionaceae the forbearance on that is ending the forbearance on mortgages is for is ending and so people's cost of

living has gone up their salaries didn't go up and now they've got to make all these payments again and that cash that they were sent out during the pandemic is gone so now they're trapped with the highest debt levels ever a deflation now like the great taking is predicting uh is exactly what I said in uh in my first book book and in episode six of hidden secrets of money so I think uh that that is what looks like is going to happen sometime in 2024 any comments yeah I would just say that uh you know everyone

should get prepared get educated and ignorance is no excuse you know so get going learn as much as you can as fast as you can right now because we are approaching something scary and the people that know how that can figure out how to nav this will do very very well so that wraps up this one please like subscribe and smash that notification Bell Alan we'll see you next time thanks Mike